The Asstt. Commissioner of Income tax-I, Kanpur, Kanpur V. M/s Abhinav Sikshan Evam Jan Kalyan Sewa Samiti, Kanpur

ITA 740/LKW/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78517 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 24-04-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 16-12-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA
• Assessee Lawyers: J J MEHROTRA
• Keywords: Opportunity of being heard
• Section: 133A; 12A; 12AA

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.740/LKW/2011 ASSESSMENT YEAR:2008 - 09 A.C.I.T. - 1, KANPUR. VS. M/S ABHINAV S IKSHAN EVAM JAN KALYAN SEWA SAMITI, 13, MIG, BARRA - 2, SECTOR - 4, KANPUR. PAN:AAOEA2081F (APPELLANT) (RESPONDENT) APPELLANT BY SHRI VIVEK MISHRA, CIT, D.R. RESPONDENT BY SHRI J. J. MEHROTRA, C. A. DATE OF HEARING 24/04/2014 DATE OF PRONOUNCEMENT 1 3 /05/2014 O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT (A) - II, KANPUR DATED 30/09/2011 FOR ASSESSMENT YEAR 2008 - 2009. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER: 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED IN LAW AND ON FACTS IN DELETING THE ADDITION OF RS.4,02,12,899/ - UNDER SECTION 69/69A OF THE INCOME TAX ACT, 1961, MADE BY THE ASSESSING OFFICER ON ACCOUNT OF DIFFERENCE BETWEEN THE BALANCE SHEE T FILED ALONG WITH THE RETURN AND FOUND DURING THE COURSE OF SURVEY WITHOUT APPRECIATING THE FACTS BROUGHT ON RECORD BY THE ASSESSING OFFICER DURING COURSE OF ASSESSMENT PROCEEDINGS. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR HAS ERRED I N LAW AND ON FACTS IN DELETING THE ABOVE ADDITION BY IGNORING THE FACT THAT DURING THE COURSE 2 OF ASSESSMENT PROCEEDINGS ASSESSEE COULD NOT RECONCILE THE FIGURES GIVEN IN THE BALANCE SHEET FILED ALONG WITH RETURN OF INCOME AND FIGURES MENTIONED IN THE DUPLI CATE BALANCE SHEET FOUND DURING THE COURSE OF SURVEY UNDER SECTION 133A OF INCOME TAX ACT. 1961. 3. THAT THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) - II, KANPUR DT. 30.09.2011 NEEDS TO BE QUASHED AND ORDER DATED 30.12.2010 PASSED BY THE ASSESSING OFFICER TO BE RESTORED. 4. THAT THE APPELLANT CRAVES LEAVE TO MODIFY ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE AND/OR TO ADD ANY FRESH GROUNDS AS AND WHEN IT IS REQUIRED TO DO SO. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE AL SO SUBMITTED THAT IN HIS ORDER , THE CIT(A) HAS DECIDED THIS ISSUE ON THE BASIS OF THE TRIBUNAL DECISION IN ASSESSEES OWN CASE IN COURSE OF PROCEEDINGS FOR GRANTING REGISTRATION U/S 12A OF THE ACT. HE SUBMITTED THAT THIS TRIBUNAL ORDER IN I.T.A. NO.476/LUC/09 DATED 13/04/2010 IS AVAILA BLE ON RECORD AND HE DRAWN OUR ATTENTION TO PARA 9. 4 TO 13 OF THE TRIBUNAL ORDER. HE POINTED OUT THAT IT IS NOTED BY THE TRIBUNAL IN PARA 9.4 OF ITS ORDER THAT IF THERE IS ANY FINANCIAL IRREGULARITY IN THE WORKING OF THE INSTITUTION, THEN THAT IS TO BE TA KEN CARE OF BY THE ASSESSING OFFICER AT THE TIME OF MAKING ASSESSMENT BY VIRTUE OF PROVISIONS OF SECTION 13 AND IS NOT IN THE DOMAIN OF CIT WHILE CONSIDERING THE REQUEST FOR REGISTRATION U/S 12AA OF THE ACT. HE ALSO SUBMITTED THAT IT IS NOTED BY THE TRIBU NAL IN PARA 10.4 OF THIS ORDER THAT ONE OF THE REASONS GIVEN BY CIT FOR REJECTING THE REQUEST OF THE ASSESSEE FOR GRANTING REGISTRATION WAS THAT THE ASSESSEE DID NOT PRODUCE THE BOOKS OF ACCOUNT BUT THE TRIBUNAL HAS GIVEN A FINDING THAT FOR ASSESSMENT YEAR 2008 - 09 , THE BOOKS ARE IN THE POSSESSION OF THE ASSESSING OFFICER AND THE BOOKS OF ACCOUNT FOR FINANCIAL YEAR 2008 - 09 RELEVANT TO ASSESSMENT YEAR 2009 - 10 WERE PRODUCED BEFORE THE ASSESSING OFFICER. HE SUBMITTED THAT THESE FINDINGS ARE IN RESPECT OF OTHER ASSESSEE I.E. NAV UDAI SHIKSHAN EVAM JAN KALYAN SEWA SAMITI AND THEREAFTER , THE TRIBUNAL 3 HAS HELD THAT IN THE CASE OF THE PRESENT ASSESSEE ALSO , THE FACTS ARE SAME AND, THEREFORE, THE DECISION WAS ALSO SAME. BUT HE POINTED OUT THAT IN THE PRESENT CASE, I T IS NOTED BY THE ASSESSING OFFICER IN PARA 4 OF THE ASSESSMENT ORDER THAT THE ASSESSEE NEITHER PRODUCED ANY BOOKS OF ACCOUNT NOR FURNISHED ANY PLAUSIBLE REPLY NOR REASON TO THE DIFFERENCES BETWEEN TWO BALANCE SHEETS. HE ALSO DRAWN OUR ATTENTION TO PARA 5 OF THE ASSESSMENT ORDER WHERE IT IS NOTED BY THE ASSESSING OFFICER THAT THE COUNSEL OF THE ASSESSEE REITERATED THAT NO BOOKS OF ACCOUNT ARE AVAILABLE WITH THE ASSESSEE AND EXPRESSED HIS INABILITY TO PRODUCE THE BOOKS OF ACCOUNT. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT BANK STATEMENTS, BILLS, VOUCHERS ETC. WERE ALSO NOT PRODUCED FOR VERIFICATION. HE FURTHER SUBMITTED THAT THERE IS NO FINDING GIVEN BY CIT(A) THAT THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE HIM. HE SUBMITTED THAT UNDER THESE FACTS, T HE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THE BOOKS OF ACCOUNT OF THE ASSESSEE. 4. LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT A CLEAR FINDING IS GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER THAT BOOKS OF ACCOUNT WERE NOT PRODUCED BEFORE HIM. IN FACT , IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE BEFORE THE ASSESSING OFFICER THAT NO BOOKS OF ACCOUNT ARE AVAILABL E AND THE REFORE, LEARNED A.R. EXPRESSED HI S INABILITY TO PRODUCE THE SAME. IT IS ALSO NOTED BY THE ASSESSING OFFICER THAT BANK STATEMENTS, BILLS, VOUCHERS ETC. WERE ALSO NOT PRODUCED FOR VERIFICATION. THE ISSUE IN DISPUTE HAS BEEN DECIDED BY LEARNED CIT( A) AS PER PARA 5.2 OF HIS ORDER, WHICH IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 5.2 HAVING PERUSED THE /ASSESSMENT ORDER AND ALSO THE SUBMISSIONS MADE BY THE LD. A.R IN THIS REGARD, I FIND FROM QUESTIONNAIRES ISSUED BY THE AO/CIT - I, KANPUR AND REPLIES BY THE ASSESSEE (AS REPRODUCED IN THE ORDER OF HON'BLE ITAT, DATED 13/04/2010) THAT THE ISSUE OF PROJECTED BALANCE SHEET 4 FOUND DURING SURVEY ON 03/03/2009 WAS ALREADY CONSIDERED IN PROCEEDINGS AFTER SURVEY AND ALSO DURING PROCEEDINGS U/S.12A AND HON'BLE ITAT, LUCKNOW BENCH VIDE ORDER DATED 13/04/2010 HAS CONCLUDED THE FINDING IN THIS REGARD: 'REVENUE HAS NOT BROUGHT ANY EVIDENCE ON RECORD TO SHOW THAT THESE DOCUMENTS (PROJECTED BALANCE SHEET) WERE THE CORRECT STATE OF AFFAIRS, THE ASSESSEE'S PLEA THAT THE BALANCE SHEET FILED ALONG WITH RETURN OF INCOME WERE THE CORRECT STATE OF AFFAIRS HAS T O BE ACCEPTED AND THEREFORE, THIS ALLEGATION IS NOT SUSTAINABLE IN LAW'. I ALSO FIND THAT A.O WHILE PASSING ORDER U/S. 143(3), DATED 30/12/2010 AND MAKING ADDITIONS AGGREGATING TO RS.4,02,12,899/ - U/S.69 AND 69A HAS NOT ESTABLISHED ANY CORROBORATIVE/CONCR ETE EVIDENTIAL MATERIAL TO JUSTIFY THE ADDITIONS. PRIMARY CONDITIONS ARE THAT THE ASSET SHOULD BE FOUND IN THE POSSESSION OF THE ASSESSEE, SHOULD HAVE PHYSICAL EXISTENCE, SHOULD BE SEPARATELY IDENTIFIABLE, ASSET IS NOT RECORDED IN THE BOOKS OF ACCOUNTS AND SHOULD HAVE SUPPORTING CONCRETE MATERIAL/EVIDENCE/CORROBORATION COLLECTED DURING ASSESSMENT PROCEEDINGS TO PROVE THE SAME, WHICH ARE ABSENT IN THE INSTANT CASE AND THE ADDITIONS BASED ON SURMISES/ PRESUMPTION/CONJECTURE ARE NOT JUSTIFIED. THE ASSESSEE HAS AIL ALONG BEEN EXPLAINING THE DIFFERENCES IN THE TWO BALANCE SHEETS AND INSISTED THAT THE BALANCE SHEET FOUND DURING THE COURSE OF SURVEY IS THE PROJECTED BALANCE SHEET ONLY WHICH HAS BEEN PREPARED FOR THE PURPOSE OF OBTAINING THE TERM LOAN FOR THE INSTIT UTION FROM BANK. IN SUPPORT OF THE SAME, THE A.R HAS SUBMITTED THE AFFIDAVIT DATED 29/09/2011 OF THE SECRETARY AND THE LETTER DATED 16/01/2008 SUBMITTED TO THE BRANCH MANAGER, PUNJAB NATIONAL BANK, BANTHER, KANPUR WHEREIN THE SAME PROJECTED BALANCE SHEET H AD BEEN ATTACHED TO AVAIL THE TERM LOAN OF RS.1.50 CRORE. THIS LETTER CLEARLY MENTIONS THE PROJECTED BALANCE SHEET FOR THE YEAR 2007 - 08 OF THE ASSESSEE, M/S. ABHINAV SHIKSHAN AVAM JAN KALYAN SEWA SAMITI. THIS CLAIM OF THE ASSESSEE IS ALSO SUPPORTED BY THE LETTER DATED 09/02/2008 OF THE MANAGER, PUNJAB NATIONAL BANK WHEREIN ALSO THE SAME PROJECTED BALANCE SHEET FOR THE YEAR 2007 - 08 HAS BEEN REFERRED FOR CONSIDERATION OF ADVANCEMENT OF TERM LOAN OF RS.1.50 CRORE. MY ATTENTION HAS BEEN DRAWN TO THE BALANCES AP PEARING IN THE PROJECTED BALANCE SHEET WHICH ARE ARTIFICIAL AND INFLATED WITH THE TEMPTATION TO GET THE TERM LOAN SANCTIONED FOR THE INSTITUTION. IN FACT THE BALANCES APPEARING 5 THE PROJECTED BALANCE SHEET ARE NOT CONNECTED WITH THE ACTUAL BALANCE SHEET FIL ED A L ONG WITH RETURN OF INCOME. IN VIEW OF THE ABOVE FACTUAL POSITION, THE SUBMISSION ADVANCED BY THE ASSESSEE DOES APPEAR JUSTIFIED AND THEY CANNOT BE BRUSHED ASIDE AS SUCH. THERE CAN BE NO DOUBT THAT THE PROJECTED BALANCE SHEET FOUND DURING THE COURSE OF SURVEY ACTION IS NOTHING BUT A PAPER PREPARED FOR GETTING THE TERM LOAN SANCTIONED FROM DIFFERENT BANKS. ACCORDINGLY, THIS IS A CASE QUITE AKIN TO THAT OF DECLARING HIGHER VALUE OF STOCK TO BANK FOR OBTAINING LARGE AMOUNT OF LOAN. THIS ISSUE HAS BEEN CONS IDERED BY HON'B L E MADRAS HIGH COURT IN THE CASE OF CIT VS N. SWAMY, 241 ITR 363 (MAD) 2000 WHEREIN THE ADDITION OF UNDISCLOSED INCOME MADE BY THE A.O ON ACCOUNT OF DIFFERENCE OF STOCK STATEMENT SUBMITTED TO BANK TO ACQUIRE HIGHER OVERDRAFT FACILITY AND THE STOCK STATEMENT SUBMITTED A L ONG WITH RETURN OF INCOME FILED WITH A.O . HAS BEEN DELETED. THE SIMILAR VIEW HAS BEEN UPHELD BY THE DIFFERENT COURTS LIKE (A) 259 ITR 744 (RAJ.) 2003 - CIT VS RE L AXO FOOTWEAR (B) 308 ITR 279 (RAJ) 2009 - CIT VS L AX MI ENGG. INDUSTRIES (C) 274 ITR 264 (JAK), 2005 - ASHOK KUMAR VS. ITO (D) 272 ITR 630 (MAD) 2007 - CTT VS APCOM COMPUTER (P) LTD. SIMILARLY, THE PROJECTED BALANCE SHEET SUBMITTED TO BANK HAS NOT BEEN CORROBORATED BY OTHER MATERIALS RELEVANT TO ASSESSMENT. EVEN, SHRI SAURAV SINGH, IN HIS STATEMENT DATED 03/03/2009 WHILE RECORDING HIS ANSWERS TO Q.NO. 11 AND 12 HAS NOT ACCEPTED THE CON TENTION AS RAISED IN THE ASSESSMENT ORDER, THE CHAIRMAN/SECRETARY HAS EXPLAINED THIS PROJECTED BALANCE SHEET AS A TOO! FOR GETTING THE TERM LOAN SANCTIONED FOR THE INSTITUTION. FURTHER, THE SOCIETY HAS GOT REGISTERED WITH AICTE AND UPTU FOR B - TECH FOR THE SESSION 2008 - 09 STARTING FROM JULY, 2008 I.E. RELEVANT TO A.Y.2009 - 10. IT SHOWS THAT THERE HAS NOT BEEN EDUCATIONAL ACTIVITIES DURING A.Y.2008 - 09. IT ALSO DOES NOT L EAD TO CONCLUSION TO UNDISCLOSED INCOME OF RS.1 . 50 CRORE ALONG WITH OTHER ENTRIES APPEARING IN THE PROJECTED BALANCE SHEET. BASED ON THE UNDERSTANDING OF ABOVE FACTUAL POSITIONS AND THE CIRCUMSTANCES, I HOLD THAT THE ADDITION OF RS.4,02,12,899/ - U/S.69 & 69A IS NOT JUSTIFIED. ACCORDINGLY, THE ADDITION OF RS.4,02,12,899/ - STANDS DELETED. 5.1 FROM THE ABOVE PARA OF CIT(A), WE FIND THAT THERE IS NO MENTION OF PRODUCTION OF BOOKS OF ACCOUNT, BANK STATEMENT, BILLS AND VOUCHERS ETC. 6 BEFORE HIM. IN OUR CONSIDERED OPINION, THE MATTER CANNOT BE DECIDED WITHOUT THE EXAMINATION OF BOOKS OF ACCOUNT SINC E THE SAME WERE NOT PRODUCED BEFORE THE A.O. ALSO AND HENCE, WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION. THE ASSESSEE SHOULD PRODUCE BOOKS OF ACCOUNT, BANK STATEMENT AND SUPPORTING BILLS AND VOUCHERS ETC. B EFORE CIT(A) AND THEREAFTER THE CIT(A) SHOULD OBTAIN REMAND REPORT FROM THE ASSESSING OFFICER. THEREAFTER, THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING HEARD TO BOTH THE SIDES. 6. IN THE RESULT , THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 /05/2014. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR